LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 23, 1997
TO: Honorable Steven Wolens, Chair IN RE: House Bill No. 1209
Committee on State Affairs By: Maxey
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1209 ( Relating
to payments to vendors doing business with state government.)
this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB1209-As Introduced
Implementing the provisions of the bill would result in a net
positive impact of $835,000 to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would amend the Government Code to require the Comptroller
to pay all vendors via electronic funds transfer. This requirement
would take effect on September 1, 1998.
In addition, the
bill would allow the Comptroller to issue warrants directly
to vendors and to bundle payments for more than one invoice
or from more than one state agency to the same vendor. The
Comptroller would be allowed to prepay vendors and to compute
and pay any interest due if a payment fell late. The bill
would remove the requirement that a vendor petition the agency
to claim interest due because late payment. These provisions
would take effect September 1, 1999.
Methodolgy
The estimates include reduced mail costs, savings resulting
from prompt payments to vendors, and costs to enhance the Uniform
Statewide Accounting System to speed payment processing and
directly pay vendors, including administrative costs to the
comptroller. For the 1998-99 biennium, the prompt payment of
vendors is estimated to save $1,371,458 from General Revenue
related funds and $3,052,600 from other funds. Reduced mail
costs are expected to save $180,288 from General Revenue related
funds and $401,290 from other funds over the 1998-99 biennium.
The estimates assume a phased-in conversion, discounts offered
by vendors, reduced penalties for late payment, and a reduction
in vendor working capital passed on to the state in the form
of lower prices.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Probable Probable Change in Number
Savings/(Cost) Savings/(Cost) Savings/(Cost) of State
from General from General from Other Funds Employees from
Revenue Fund Revenue Fund FY 1997
0001 0001 OTHER-OTH
1998 ($401,250) $76,312 $169,856 3.0
1998 (315,600) 1,475,436 3,284,034 3.0
2000 (230,000) 4,243,251 9,444,656 2.0
2001 (170,000) 4,429,966 9,860,247 2.0
2002 (170,000) 4,621,011 10,285,477 2.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($324,938)
1999 1,159,836
2000 4,013,251
2001 4,259,966
2002 4,451,011
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK ,JD ,RN